Egyptians erupt in anger as they react to President Hosni Mubarak's speech, which was broadcast on Tahrir Square in Cairo, Egypt, on Thursday, February 20, 2011, in which Mubarak announced that he was not stepping down. (Rick Loomis/Los Angeles Times/MCT) Rick Loomis / Los Angeles Times / MCT

Egyptians erupt in anger as they react to President Hosni Mubarak's speech, which was broadcast on Tahrir Square in Cairo, Egypt, on Thursday, February 20, 2011, in which Mubarak announced that he was not stepping down. (Rick Loomis/Los Angeles Times/MCT) Rick Loomis / Los Angeles Times / MCT

Obama officials surprised by Mubarak's decision to stay

WASHINGTON — As the drama in Egypt and the fate of its embattled president captivated the world Thursday, the Obama administration appeared to be as much in the dark as everyone else.

"We are witnessing history unfold," President Barack Obama, who watched events on television aboard an Air Force One flight to Michigan and back, said without knowing what that history would be.

"We're watching a very fluid situation," said the president's spokesman, Robert Gibbs.

The murky outcome Thursday, in which President Hosni Mubarak said he'd stay in office until September even as he turned over some powers to his vice president, appeared to heighten the chances of violent clashes on Egypt's streets as well as the administration's foreign policy dilemma.

Obama and his aides have made their views known throughout the 17-day crisis. On the previous two occasions when Mubarak spoke on state-run TV, Obama responded with a televised statement of his own.

After Mubarak spoke Thursday, however, the Obama and his advisers dropped out of sight. Later, the White House released a strongly worded statement.

"The Egyptian people have been told that there was a transition of authority, but it is not yet clear that this transition is immediate, meaningful or sufficient," Obama said in the statement. "The Egyptian government must put forward a credible, concrete and unequivocal path toward genuine democracy, and they have not yet seized that opportunity."

Panetta told the House Intelligence Committee that "there is a strong likelihood that Mubarak may step down this evening." Later, Panetta cautioned that U.S. intelligence had no confirmation of that fact. "So we're just monitoring the situation right now," he said. Panetta, it turns out, was referring to media reports, a senior intelligence official told McClatchy.

Mubarak didn't step down.

Obama and his aides for days have urged Mubarak to begin an immediate transition of power and hold broad talks with Egypt's opposition, but stopped short of calling on him to resign. Throughout, they have tried to walk a narrow line that acknowledges the protesters' demands, while avoiding a power vacuum in a nation of 80 million people, the Arab world's most populous.

U.S. officials wouldn't say Thursday evening whether Mubarak's transfer of powers to Vice President Omar Suleiman and his promises of constitutional changes met U.S. goals. It may not matter, because the protesters gathered in Cairo's Tahrir Square immediately rejected them.

A senior U.S. official said the Obama administration wasn't caught off guard by the thrust of Mubarak's speech.

"Based on conversations (with Egyptian counterparts), we had a set of expectations" about what he would announce, said the official, who like others requested anonymity to speak more frankly. The problem, the official said, was that "Mubarak's speech muddled the message."

While it appears Mubarak announced "a genuine transfer of authority," he said, "that remains unclear to the people of Egypt."

Nader Hashemi, a professor and Middle East expert at the University of Denver, assessed Mubarak's address differently. "It's a very defiant speech," he said.

"A clear message has been sent that the stalemate continues," Hashemi said, adding that Mubarak feels "very comfortable that he can ride this thing out."

Shashank Bengali describes the scene in Tahrir Square

Divining decision-making at the top of foreign governments can be a difficult business in the best of times, to say nothing of when a regime in power for 30 years is fighting for its survival.

But the U.S. government has had close military, diplomatic and intelligence ties with Egypt, nurtured in the decades since it signed a peace treaty with Israel.

White House and Pentagon officials said they knew Mubarak was under tremendous pressure to resign, but few expected Thursday to turn into a potentially historic day.

With a State Department briefing cancelled, Obama's brief remarks at Northern Michigan University, on a visit meant to pitch a national wireless Internet network, were among the few public statements from top U.S. officials.

White House officials privately conceded immediately afterward that Obama's speech wasn't based on any inside knowledge of what was happening within Egypt's presidential palace. "We tried to make it as general as possible," said one administration official, who wasn't authorized to speak for the record.

Throughout the day, government spokesmen prepared several different sets of talking points, based on all the possible speeches Mubarak might give. What would they say if he resigned? What if he put the military in charge? And then they waited for the speech.

At the conclusion of Mubarak's remarks, amid the shock that less may have changed than met the eye, there was quiet relief among officials that they hadn't commented beforehand.